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Monthly Archives: June 2012

Adam Morton

June 26, 2012

85 per cent of of 38 firms directly liable for the carbon price have a carbon strategy in place.85 per cent of of 38 firms directly liable for the carbon price have a carbon strategy in place. Photo: Reuters

BUSINESS leaders overwhelmingly believe carbon pricing will survive and those directly affected have started taking steps to reduce greenhouse gas emissions, according to a survey of senior executives.

The survey of 136 executives commissioned by multinational GE found nearly three-quarters believed the carbon price scheme would remain despite the Coalition’s pledge to repeal it if elected.

But nearly half said they thought the scheme starting on Sunday – requiring big emitters to pay a fixed rate per tonne of carbon dioxide for three years, before evolving into emissions trading under which pollution permits can be bought and sold on the market – would eventually be replaced with an improved model.

Of the firms directly liable for the carbon price, it found 85 per cent had a carbon-reduction strategy in place. Across all firms, nearly a third, up 3 per cent from early last year, had modelled the impact of different carbon prices on operations.

But there was a slight drop in the way businesses felt prepared for the scheme.

The Economist Intelligence Unit, linked to the The Economist newspaper and which conducted the survey, found this was likely to be in part due to nervousness about the scheme being greatest just before it was introduced.

While 72 per cent believed carbon pricing would survive, nearly two-thirds thought the $23-a-tonne starting price was too high. About one in 10 said it was too low.

Only a third believed the opportunities created by carbon pricing would outweigh the risks in the long run – down from half last year.

GE’s director of ecomagination, Ben Waters, said evidence from New Zealand, where emissions trading started in 2008, suggested concern would wane after the scheme started.

In submissions to the NZ government, 63 per cent of companies last year said they backed its scheme. Two years earlier 78 per cent were opposed.

”Given we are about to impose a new cost on business … I don’t think it is surprising that there is some anxiety and nervousness. I’d be very surprised in a year’s time if it doesn’t move in the other direction,” Mr Waters said. The survey showed the scheme was doing what it was supposed to be doing: spurring businesses to become more energy efficient and cut emissions.

About a quarter of those surveyed led energy and resources companies, 15 per cent were in manufacturing, 12 per cent in construction and real estate and 12 per cent in retail.

Companies listed as having prepared for a carbon price include oil and gas multinational Shell, which began planning for emissions trading in 1997 and factors a $40 carbon price into investment decisions.

Wesfarmers, the owner of Coles, expects a net carbon cost of $100 million, compared with 2011 revenue of $56 billion. It said over four years it had invested heavily in energy-efficiency technology to cut power consumption at its stores and reduced emissions from its chemical business.

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Two new taxes are on the way, but we shouldn’t complain

June 26, 2012Opinion

Australia is one of the lowest-taxed countries in the Western world.Australia is one of the lowest-taxed countries in the Western world. Photo: Illustration: Karl Hilzinger

Australia will remain one of the lowest-taxed countries in the Western world.

FEW Australians are aware that we have one of the three smallest governments in the Western world. We complain endlessly that our governments tax too much and spend too much – but that is not the way we appear in international comparisons.

The International Monetary Fund estimates that, in 2012, Australia’s governments, state and federal, will raise a bit over one-third of our GDP, 34.5 per cent, and spend 36.3 per cent. Of the 34 advanced economies, our revenue is the ninth lowest, our spending the seventh lowest.

That might not sound too flash. But the four lowest-spending countries are Hong Kong (19.1 per cent), Singapore (19.4), South Korea (20.4) and Taiwan (20.9), where your welfare is your responsibility.

Among those with whom we compare ourselves, only New Zealand (33.1 per cent) and Switzerland (34.3) have leaner governments.

But isn’t revenue the best comparison, which means the US and Japan are smaller governments than ours? No. Both are running huge deficits – as a share of GDP, 7.9 per cent in the US, 9.1 in Japan – which will have to be paid for by future taxpayers. Spending, not revenue, is the test of the size of government.

Australia and New Zealand aim to run a Western welfare state while spending far less than other Western countries. The gap between us and them is huge: on average, governments spend 42.2 per cent of GDP in advanced economies, 43.1 per cent in the G7, and 48.2 per cent in the European Union. So far, you would have to say, more spending has not brought more success.

On Sunday, Australia will gain two new taxes. The carbon tax initially will raise $4 billion a year: 0.3 per cent of GDP, rising to 0.4 per cent as it settles in. Revenue from the mining tax can’t be estimated accurately, but Treasury puts it at just $3 billion, or 0.2 per cent of GDP, while private-sector economists say it won’t even raise that.

Neither tax will change the reality: Australia is one of the lowest-taxed countries in the Western world. If Tony Abbott becomes prime minister next year, as seems likely, he will try to repeal both taxes, and will probably succeed. But it will be only a temporary victory. Both taxes will return, probably in different forms. Both taxes will be levied by future Liberal governments.

You can predict that, because in the past the Liberals have rejected so many Labor reforms, only to adopt them later. Medicare, for example, was initiated by the Whitlam government as Medibank, scrapped by the Fraser government, reinstated by the Hawke government, then embraced proudly by John Howard and his health minister, Tony Abbott.

The Liberals initially fought Aboriginal land rights, only to adopt them once in government. We saw similar feigned anger over the Keating government’s Native Title Act, only for the Howard government to adopt it with minor changes. Howard’s Liberals opposed compulsory superannuation when the Hawke government introduced it. There are many other examples.

A carbon price is the cheapest way of getting companies and people to make choices that slow the growth in greenhouse gas emissions heating the Earth. Give us a price incentive, and we find ways to reduce emissions with little damage to profits or our standards of living.

The market does this better than governments giving taxpayers’ money to companies to do things they would do anyway.

A mining tax is justified because minerals belong to the people, and we deserve a fair share of any super profits made from mining them. The Coalition accepts this argument for oil and gas; the Howard government raised billions of dollars from the petroleum resource rent tax. A future Liberal government will agree that it makes sense to apply a similar regime to iron ore and coal. That is why Liberal governments in resource-rich states have raised royalty rates.

In Victoria, alas, Ted Baillieu does not have that option. And since the High Court interprets the constitution to mean that state governments in effect are forbidden to tax income, tax expenditure or tax production – despite the intentions of the founding fathers – Baillieu is left with a pack of lousy taxes, mostly on transactions, which are volatile when markets turn down, as now.

The sharp fall in housing sales and prices, flat spending on items carrying the GST, flat jobs growth: state revenue has been hit by a perfect storm. And if you don’t have the revenue, you can’t pay the salaries.

In 11 years, the Bracks and Brumby governments increased the public service from 23,000 to 37,000. Surely it makes sense for Baillieu to cut it back to 33,000 to help ride out the fiscal storm.

His government is in trouble for many reasons, such as its excessive cuts to TAFE, but cutting the public service should not be one of them.

On most issues, this has been a more moderate and sensible government than it has been given credit for. Its weakness is the one Paul Keating pointed to last week in the Gillard government: it lacks a compelling narrative, a credible explanation to us about what it is doing, and why.

Baillieu became Premier because of his self-discipline, good judgment, a progressive streak, careful planning and willingness to take risks.

Now he must add an ability to communicate, to define his government to us in ways we will endorse. The stakes are high.

Tim Colebatch is economics editor.

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Clive James, commenting on how his illness has become some new story material for someone else’s entertainment and consumption.


Clive James

June 25, 2012Opinion

Australian born comedian and author based in the UK Clive James“The journalists for the cheap press are uneasily aware that nobody cares much about what they say” … Clive James. Photo: Ben Rushton

Everybody knows the story of how Mark Twain read newspaper stories about his death and said they were much exaggerated. But to know how he felt, you need to have read your own obituary, or at least to have read an interview in which you seem to be knocking on death’s door.

On Thursday London’s Daily Mirror carried just such an interview with me. It was harrowing. You would have thought that I had only a few hours to live. The strange thing, though, was that I never gave the interview to the Mirror.

The newspaper had got hold of a transcript of the instalment devoted to me of the BBC radio show Meeting Myself Coming Back and selected a few dozen quotes so that I seemed to be practically expiring in the arms of the journalist assigned to register my dying breath.

But what I might say for the radio, where the tone of voice is under my control, would not be the same thing as I might say to a newspaper journalist, where the tone of voice is more under his control than under mine. In the radio interview I say that I am getting near the end of my life. Well, at my age everybody is. But if you put the statement as baldly as he did, it sounds as if I am passing out in the journalist’s lap.

If I did so, I would do my best to bite him in the upper thigh, for he is a very mischievous fellow. He, my interviewer at the gates of doom, is like one of the old lags out of Evelyn Waugh’s classic novel Scoop, which I just happen to have been re-reading this week.

During my life I have read the book several times, each time with growing awareness that Waugh wasn’t exaggerating when he made every journalist in the book a confidence man. Journalism on that level is practised with a remorseless logic. Why say that you are quoting from the transcript of a broadcast when you can just leave it to be assumed that you have conducted a proper interview? If the victim objected, would anybody listen?

I’m not objecting, because I haven’t got time. In the interview I am represented as saying that I am losing my battle with leukaemia. Well, of course I am. Eventually I must. But the main thrust of the broadcast is, I can assure you, quite merry. In my life I have managed to get a certain amount done, and my chief aim now is to live longer so that I can do more. My current book of poems, Nefertiti in the Flak Tower, hits a pitch that I have been working towards all my life, and I sincerely hope that I am not finished yet. I enjoy life, but work has always come first. And the people I love feel the same about their own work. Nobody is a member of a leisured class.

Journalists who write junk like that aren’t really working at all. As happens in Scoop, they take dull stuff out of one tray and brighten it up until it is ready to go into another tray, on its way to publication. Evelyn Waugh was a master at parodying the mental processes involved, because he had something of the malicious gossip in his own personality. But he was careful to put most of that malicious impulse into his novels, which were avowedly fictional.

I’m getting to be an old man now. I still have a few years left, I hope, even with my range of ailments, but I’m definitely no spring chicken. I would have thought that my years of celebrity were safely behind me. They never amounted to much. They had mainly to do with television, which people forget, although they don’t often forget a face. Only yesterday someone in the street said: ”I always enjoy your shows, Mr Anderson.”

But if you were ever on television the press never forgets it, because for them, television is a measure of achievement. If you have been up there, you must be somebody, and will always be that somebody even if you head for the exit. So when the Mirror ran its piddling so-called interview, the telephones started to ring, and newspapers wanted a last article from the dying man, if necessary transmitted by telephone from the intensive care unit.

I hope my wonderful hospital, Addenbrooke’s in Cambridge, wasn’t too much pestered. I know my agent was, not to mention my family. In keeping with my somnolent metabolism over the past couple of years of illness, I was slow to find out about the fuss. It was fully developed before I tuned in. Instantly I thought: well, I could sure do without this. But actually it comes with the territory.

The journalists for the cheap press are uneasily aware that nobody cares much about what they say. Hence their sad conviction that they can say things any way they like, even if it means staging a man’s funeral for him just because he makes a few down-in-the-mouth remarks. Talk about getting the hearse before the horse.

This is an edited version of an article first published in the London Telegraph.

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PUBLISHED: 20 Jun 2012 21:58:00 | Kate Mills

Every economy is made up of millions of individual units – people buying and selling, marrying and giving birth, just living their everyday lives. Sometimes in news reports about the economy this can be forgotten. So behind all the concern about Europe and whether countries such as Greece and Spain will go bankrupt, there are heart-rending stories about how the Greeks in particular are dealing with an economy that is falling over.

Anecdotal reports are that the suicide rate in Greece has doubled and The Sydney Morning Herald (published by Fairfax which also publishes BRW) last week had a story with details from recent Greek suicide notes. These were from people that had worked all their lives only to find themselves with nothing. One was from a man who could not live with the shame of scrounging from bins after the pride of running his own business.

Austerity has been promoted as the answer in Europe but it does not appear to be working. Politicians like austerity because it is a neat moral solution to an economic problem. For people that have overspent, under-saved and want to retire early, it seems only right that they should be required to tighten their belts and put right their past wrongs through hard work and sacrifice to build up their balance sheets. However, this moral viewpoint requires that public sector austerity is in some way accompanied by private sector growth. From a view on the ground, austerity has bred only austerity, it has not bred growth.

What it does breed is anger from those under austerity’s yoke. In Europe, this is demonstrated by the rise of niche and extreme parties that feed off voter angst. So in Greece, there has been the swift rise of Syriza – an extreme left-wing party that used to be a ragtag bunch of interests that has coalesced around voter anger into a workable party. At the same time in Greece, Golden Dawn – an extreme right-wing party that campaigns under a swastika-like banner – is also experiencing a renaissance in the polls. And it’s the same across other countries in Europe where recent state and local elections in France and Italy saw strong showings from far-right and far-left parties. In Holland, anti-austerity sentiment has given the balance of political power to a right wing anti-Islamic faction that wants to see an end to multiculturalism. It seems the very tool that European powers thought would bring political stability to the region – currency union – is the same tool that is feeding extremist parties of all shapes and sizes.

BRW does not wish to be alarmist. European leaders know as well as anyone the dangers that threaten stability and will be working all hours at the G20 summit in Mexico this week to come up with a solution that placates bond holders and German voters with regards to Greece but also gives countries facing austerity packages enough oxygen to feed the green shoots of their economies.

What does this all mean for Australia? While Greece is far away, it will affect us in terms of its impact on the global economy and that ephemeral but essential ingredient for success – confidence. It’s also another reminder of how good we have it, with our strong economy, our proximity to the powerhouse economies in the Asia-Pacific and our system of government. While neither of the main parties seem inspiring, at least they are stable.

Kate Mills


PUBLISHED: 19 Jun 2012 07:12:00 | Georgina Dent

Mobile workers head for cafes, libraries<br />

Mobile workers one day may be as ubiquitous as mobile phones but that doesn’t mean everyone will be working from home. A growing number of workers around the world are opting to work in a “third-place environment”, defined as convenient locations employees use as work spaces as technology and their jobs no longer fix them to a desk.

A global research report from ZZA Responsive User Environments, which combined data from a survey of 17,000 global businesses, reveals that working flexibly is no longer synonymous with working from home. More than half the respondents from 60 countries reported doing some or all of their work from a location separate to their home or office. Three-quarters of the Australians surveyed said third-place environments are more convenient and suited to their lifestyle than a permanent office. More than half the local respondents prefer to work in informal spaces such as cafes and libraries instead of the company-owned office, while 44 per cent favour working business centres or lounges. The report found the benefits of these arrangements range from reduced stress and improved productivity for the employee and cost-effectiveness, scalability and reduced property commitments for businesses.

“Today’s dynamic technological, economic and social conditions create opportunities for individuals and pose new challenges for organisations,” says the author of the report, Ziona Strelitz. “Attracting and harnessing talent is a central challenge for business and third-place working that enhances the quality of work life supports this agenda.”

Global research firm International Data Corporation forecasts that by 2013, the Asia-Pacific region will be home to 734.5 million mobile workers compared with 546.4 million in 2008. IDC defines mobile workers broadly to include employees who work from home, have no office base and those who work while travelling.

Internet/ social media – barriers to entry into new markets, or even to create new markets, are dissappearing. All of us are players in vast enmeshed markets and networks, and are now aware or unaware entrepreneurs or affected by entrepreneurs…question for all of us – like Fairfax just discovered – when do we start to pay attention?
Smart TalkPUBLISHED: 20 Jun 2012 21:30:40 | Harold Mitchell


Don’t think that you know everything.

That is a lesson I learned a long time ago.

And it was reinforced in 2000. I had built quite a reputation in the advertising and media business by establishing what was to become the biggest media specialist company in Australia. It was based on a deep understanding of TV, newspapers, radio and magazines, which had been the basis of all media for half century.

It had been an incredible 50 years with the emergence of TV and the expansion of all the other media forms to the point where the average person was spending almost one-third of their life, and certainly half of their waking hours, directly in touch with the media.

I had been lucky to have stumbled into this industry. But I had learned that to make the most of luck I had to trust others. And in order to trust, I had to learn to listen and listen and listen.

This is not a characteristic we readily apply to entrepreneurs, but believe me, it is essential as I was about to learn again on a fateful day in 2000.

I was sitting listening to one of the endless supply of merchant bankers who sat before us with a never ending stream of great ideas. They’re not great of course – they’re just ideas. Greatness comes with real achievement and only one in a thousand ideas might make it but that’s not the way merchant bankers understand the world – they think everyone of them is worth our hard-earned cash.

My 28-year-old son Stuart was sitting with me as we listened to a man telling us about a new thing called the internet. Google was still an unknown company in a garage fast running out of cash and all the big media companies were pretending the internet didn’t exist. For many, the digital age meant transistor radios and electronic games for kids.

But what was being pitched to us was not about kids, it was an idea about advertising on the net. I should divert myself for a moment here to tell you that 12 years later, advertising on the net is about to overtake advertising on television and in newspapers. It is the greatest media change in our lifetime.

However, back to 2000. As the spiel about establishing an advertising internet business drew to a close, I was about to say, “Thank you, we’ll get back to you” when my son said, “Dad, I think we should do this.”

Within a few months we started a company to the public called eMitch and a little over a year ago we sold it in its final form to the great world advertising firm Aegis for $363 million.

My son plainly knew more about the emerging digital world that I did and I am more than happy that I was smart enough to listen to him.

Any entrepreneur has to listen not only to smart people but be prepared to surround themselves with smart people who are not afraid to go out on a limb.

Smart entrepreneurs know that there are many people who have better ideas than them. They develop people by listening to them and allowing them to make mistakes.

This doesn’t mean that anything goes. Far from it. The experienced entrepreneur knows how to invest his or her acquired wisdom in smart young people and knows how to pass on his insights so that everyone can learn from mistakes and seize new opportunities.

You will never be short of good people if you can create this type of environment. Great people want to work with great people. This has been the basis of my business from the beginning.

And history has shown that it works. History also shows that a failure to listen, understand, encourage and trust people leads to disaster.

Look at Napoleon. The reason for his demise is clear. In the end he surrounded himself with sycophants. He didn’t want anyone to disagree with him, so he surrounded himself with people of like mind, or, more likely, no mind. And then he compounded his mistake by wanting to control everything himself, without listening to any advice. With no delegation, all momentum was lost and he was bogged down in his own personal obsessions and more worried by his toothache than his empire.

The great man had stopped leading from the front on the big white horse and relying on the skill and expertise of the thousands of troops behind him.

Don’t be like Napoleon and die alone in exile on an island with a toothache.

A new technique for selection ?
by: By Simon Black


ETaC Malcolm

This is me at the ETaC course in Canberra. Picture: Supplied Source: The Daily Telegraph 

My leg won’t stop bouncing and I wish I had something in my hands but they took my pad and coffee cup off me when I sat down.

Five things you think you know about lying that are wrong  TOUCHING THE FACE
Not only is body language the least reliable way to predict if someone is lying, it’s something a lot of people know about. So it’s the first thing a liar will try not to do.

Studies have shown people who lie actually make more eye contact. Turns out they want to see if you believe them or not.

You might just be a naturally “wriggly person” or it could indicate you’re experiencing emotional strain. Which doesn’t necessarily mean
you’re lying.

It’s all about baseline and context. Is this something they would normally have to think hard about? Are they under stress? Both things that can make someone sound as shifty as a 70-year-old’s kneecap.

If someone can’t remember something it doesn’t mean they’re lying. People forget things all the time. Traumatic events we “want” to forget can be especially hard to recall. 

My interrogators sit around me in a circle. There is a private defence contractor, a policewoman turned “consultant”, a psychologist who speaks fondly of his time in correctional facilities and a public servant.

The last man is a fit-looking and well dressed Columbian who says he works “in IT” but I’m convinced he works for ASIO. He smirks at me and writes something down on a pad in his lap.

I crane my neck to try to see what he’s written but he angles the pad away. My voice shakes and sometimes I say too many words before I remember to breathe. I feel like I’m back in school.

Which I am – I’m in a class learning how to spot liars.

I’m doing a course called “Establishing Truth and Credibility”, or “ETaC”, a four-day intensive program run by EI Asia Pacific, a licensee of Paul Ekman International.

The course is based on the work of Dr Paul Ekman – whose work was made famous by the television show Lie to Me.

It is part of what has been a recent expansion of Ekman’s work – hoping to make a profitable global business out of what many have considered to be solely the domain of you-wouldn’t-believe-it shows like The Mentalist or Sherlock Holmes.

The training is delivered by Alan Hudson and Malcolm Anderson, who work like a good cop, bad cop team. An Oxford graduate, Alan is relaxed and friendly but behind that I notice he is constantly watching.

“Did you see that?” he asks us as we look at footage of a cold war spy taken the day before he defected to Russia.

“Quick little micro of sadness at the end there.”

He’s referring to a micro-expression – a tiny fleeting facial expression that lasts only a fraction of a second. We give him back blank looks. And when he slows the video down there it is – a moment where the man’s eyebrows and face turn down into an expression of pure sadness, vanishing a split second later.

“It doesn’t match what he was saying at all,” Alan says.

I feel like I’m watching a magician.

“This course represents a ‘new frontier’ of emotional skills. It takes the latest rigorous science and understanding about the nature of emotions, and the nature of trust and deception, into day-to-day workplaces, people’s lives and relationships. Translating this into the delivery of practical skills-based training.”

ETaC Malcolm

ETaC Malcolm

Doctor Paul Ekman, an expert in detecting suspicious behaviour. Picture: Renee Nowytarger
Source: The Daily Telegraph 

And it’s not a trick – as Malcolm constantly stresses – this is a science.

Striding into the course with a goatee he says he shaved in after he realised his full face beard made him look like an “old fart” he comes across a bit like what Richard Branson would be like if he interrogated people for the CIA.

“What I want to see from you is some real rigour,” Malcolm says. “Never, ever, ever, jump to conclusions.”

Five ways to spot a liar  GET A ‘BASELINE’
Know how the person behaves when not lying and look for deviations from that. It means something is going on.

Look for moments when the individual is working too hard or not hard enough for what they’re saying. Remembering shouldn’t be difficult if recent and should be harder if long ago.

Dr Ekman’s research shows the area most reliable for deception is the face. A lot of people will leak micro-expressions without realising it. The seven universal facial expressions are fear, surprise, disgust, contempt, anger, sadness and happiness.

Stories have lots of moving parts because they happen in real life. People remember strange things that are out of place and can usually remember things around the event. If the moment seems to exist by itself in space it can indicate a lie.

Pay attention to conflicting messages. Someone says they’re happy while they look sad? Something isn’t right. Likewise if someone moves a lot when you’re chatting with them, but stops when you ask about something particular. 

What did we learn? In addition to embarrassing me the first hour quickly shows me everything I think I know about lying and liars is wrong.

Someone crossing their arms means they are feeling defensive. Wrong.

You can spot a liar because they touch their face or rub their nose. Wrong.

It turns out body language is the least reliable indicator of deception of all of the communication channels. People who are lying make less eye contact. Dead wrong.

They make more – they want to check to see if you’re swallowing their stories.

The first exercise we do is tell that embarrassing story while we are videotaped – an uncomfortable exercise considering I’ve only just met these people.

As a group which includes a prison psychologist, a former police officer who creates interrogation questionnaires, a defence contractor and a humble journalist we score roughly 50 per cent.

That’s the same score we would have gotten if we flipped a coin.

But we get better. Listening is the first step. We are taught to gather data from the five streams of communication and to construct and test multiple hypotheses.

Then you construct a “baseline”: What do you know about the person you’re talking to? What is normal for them? Once you know how someone normally acts you can know when they’re under stress or thinking harder than they should be.

Almost an entire day is spent learning how memory works: where certain memories are stored in the brain, how they are accessed, how to notice when something is a real memory being retrieved or when it is a false memory being constructed or imagined.

And the whole time practice, practice, practice.

After the theory is done we run through hours of videos.

Men and women who have bludgeoned their partners to death, cheaters, liars, thieves and – of course – innocent people thrown in to make sure we are evaluating our subjects and not simply crying “liar” every time someone speaks.

After the first day I’m wondering if I’ve wasted my money. The other people in the course seem far more able to apply the learning and I consider the possibility that I’m wasting their time as well.

But then a killer changes my mind. While I’m watching a video of a distraught husband plead for public help to find his wife’s killer I see a micro-expression of anger where it shouldn’t be.

That fifth of a second of wide open eyes and the tense set of his mouth are out of place as he tells a reporter how his wife’s murderer must have delivered the killing blow.

“By the end of the fourth day we are all much better at catching liars – and lying ourselves”

But later when he talks about the creature that murdered her he shows nothing at all, even speaking as the killer – speculating how he must have felt and his reasons for the crime.

He doesn’t even say the word “murder” or “kill”.

I decide that he is lying based on his emotional leakage not matching his story and I’m right. I walk out that night feeling like a genius.

I shoot a knowing smile at the waitress in the restaurant where I have dinner knowing that all of her secrets are laid bare on her face and all I have to do is look.

Back in class the next day I mess up the first three exercises in a row, two “false negatives” and a “false positive” – worse than pure chance. So it’s back to the drawing board.

That’s at the centre of the practice. Every time you think you’ve got it fixed and you know the key to telling liars you find someone it doesn’t work on.

And that’s the real key to telling if someone is lying – pay attention, get the context, get a baseline and notice when your subject does something that doesn’t fit.

Then think about why it doesn’t fit. Not just one reason. Think about many. Test those ideas. Then look again. If they normally touch their nose you can’t use that as an indicator of deception. If they are a naturally sad or angry person that won’t help you either.

“And that’s the real key to telling if someone is lying – pay attention, get the context, get a baseline and notice when your subject does something that doesn’t fit”

At the start of the fourth day Malcolm plays bad cop again, craning his head towards us yelling that today we have to show him “real rigour” today.

“Today’s the day you bring it all together,” he says.

When I first have coffee with him, Alan tells me the reason he was attracted to Ekman’s work was the rigour and the science behind it.

“Ekman training is only science based, practical skills building program available that builds emotional intelligence, leadership skills, and teamwork,” he says.

And businesses are starting to see the benefits.

“There has been an increased demand and interest from technology-centric professionals in ICT, engineering, computing etc. for science-based skills to help them manage their teams, clients, grow their businesses.”

The defence contractor tells me he deals with clients on a daily basis who he would like to be able to read quickly while the “contractor” tells me she already designs questionnaires and screening to detect deception and is hoping to learn some extra tricks to add to her arsenal.

I still think Mr “in IT” works for ASIO.

By the end of the fourth day we are all much better at catching liars – and lying ourselves.

“I don’t think we’ve had such a high-achieving group before,” Malcolm tells us on our last day.

“Or one quite so obsessed with bodily functions.”

I walk out of the course feeling like the work has only just begun. I buy a whiteboard for my bedroom and write the points from the four days on it.

Oh yes, envy the poor woman I bring home to that.

I buy Ekman’s METT and SETT online training programs for facial expressions and watch the seven universal facial expressions flash past me in fraction of a second intervals. Once a week I watch an interview taking down notes from each of the five communication channels.

It’s paying off – I’ve become more painful to be around. When I get a coffee on the weekend I ask the barista how she is and watch the inside of her eyebrows tighten up and in while the corners of her mouth go down in a quick puff of sadness.

“I’m great,” she says.

“Really? You look a little sad,” I say.

After some protest she tells me she’s had a argument with her boyfriend, all but ending the relationship.

My response is only natural: Hell yes, I’m Sherlock Holmes. 

Leonie Lamont and Jessica Wright

June 22, 2012 – 11:40AM

The federal government faces a new challenge to its mining tax, with Fortescue Metals Group today lodging a challenge to the tax in the High Court.

In a statement to the ASX, Fortescue chief executive Nev Power this morning said the company had legal advice and would challenge the tax on constitutional grounds.

‘‘We believe we have a good case for challenging the Minerals Resources Rent Tax on constitutional grounds and we look forward to the resolution of these important issues in the High Court,’’ he said.

The Fortescue challenge is based on grounds that the tax discriminates between the states under section 51(ii) of the Constitution.

It further gives preference to one state over another contrary to section 99, and restricts a state’s ability to encourage mining contrary to section 91 of the Constitution, Fortescue says. It also says it curtails state sovereignty.

After 18 months of acrimonious debate that brought down former prime minister Kevin Rudd, the 30 per cent Minerals Resource Rent Tax (MRRT) was passed earlier this year by the Gillard government.

The government expects the tax to reap $9.7 billion over its first three years.

While large miners Rio Tinto and BHP were able to strike a deal with the federal government over the final scope of the tax, smaller miners including Fortescue and Gina Rinehart’s Hancock Prospecting have waged a fierce battle against the tax.

Fortescue has been threatening to challenge the MRRT in the High Court for months, arguing it is unfair and was been stitched up by the government in conjunction with the big miners.

A spokesman for the acting prime minister and Treasurer Wayne Swan said the challenge had not come as a surprise.

”Mr Forrest has made it clear that he is staunchly opposed to the government spreading the benefits of the mining boom to millions of households and small businesses who aren’t in the fast lane,” he said.

“The Gillard government believes Australia’s non-renewable natural resources belong to all Australians, not just to a handful of mining billionaires, and is determined to deliver the MRRT to ensure the Australian community shares in the benefits and opportunities of the mining boom.”

The government has previously indicated it has considered its constitutional position on the mining tax carefully and is confident the legislation will withstand a challenge.

In November, constitutional expert Greg Craven told The Age that there were several sections of the constitution that Fortescue could use to sustain a legal challenge to the mining tax.

Just this week the High Court ruled that the federal government had exceeded its implied powers under the Constitution in funding the nation’s schools chaplaincy program.

Assistant Shadow Treasurer, Mathias Cormann said the Fortescue challenge had been ”inevitable”.”The mining tax is a bad tax negotiated personally by Julia Gillard and Wayne Swan through a highly improper process,” he claimed.

”They negotiated the design of a significant new tax on an important new industry exclusively and in secret with the three biggest mining companies.

”The Gillard government has a very poor track record when it comes to ensuring its policy changes are consistent with relevant legal requirements.

”We look forward to the considerations and findings of the High Court.”

Read more:

Alvesson, M., & Spicer, A. (2012). A stupidity-based theory of organizations. Journal of Management Studies, (in press)

In this paper we question the one-sided thesis that contemporary organizations rely on the mobilization of cognitive capacities. We suggest that severe restrictions on these capacities in the form of what we call functional stupidity are an equally important if under-recognized part of organizational life. Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways and avoidance of justifications. We argue that functional stupidity is prevalent in contexts dominated by economy in persuasion which emphasizes image and symbolic manipulation. This gives rise to forms of stupidity management that repress or marginalize doubt and block communicative action. In turn, this structures individuals’ internal conversations in ways that emphasize positive and coherent narratives and marginalize more negative or ambiguous ones. This can have productive outcomes such as providing a degree of certainty for individuals and organizations. But it can have corrosive consequences such as creating a sense of dissonance among individuals and the organization as a whole. The positive consequences can give rise to self-reinforcing stupidity. The negative consequences can spark dialogue, which may undermine functional stupidity. © 2012 The Authors. Journal of Management Studies © 2012 Blackwell Publishing Ltd and Society for the Advancement of Management Studies

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By Peter Dyball, Founder & Managing Director at Pit Crew Management Consulting Pty Ltd on 18 Jun 12

Could resistance to EMAs actually be a bigger threat to the long term future of Australian workers? Are you after some logical analysis rather than hysterical rhetoric? This commentary by major project labour market expert Peter Dyball, appeared in the latest edition of Pit Crew News, June 2012… 

The ink is hardly dry on Australia’s first Enterprise Migration Agreement (EMA) and its announcement has resulted in considerable attention, which is surprising given the fact that such agreements have been a long time in the making and the process by which they were conceptualised and defined was exhaustive.

The National Resources Sector Employment Taskforce (NRSET) was established in November 2009 with the objective of helping secure skilled workers needed for major resources projects over the next five years. The Taskforce was chaired by Hon Gary Gray and consisted of representatives from government departments (state and federal), an industry reference group (largely union representatives), and a skills reference group which consisted of universities and TAFE representatives, indigenous and other training entities. In addition the taskforce received 97 public submissions in response to the Resourcing the Future Discussion Paper. In July 2010 the Taskforce presented their final report – Resourcing the Future, which contained 31 recommendations. Recommendation 4.2 related to Enterprise Migration Agreements.

In March 2011, the Minister for Tertiary Education, Skills, Jobs and Workplace Relations announced that the Australian Government has accepted all 31 recommendations presented in Resourcing the Future.

The EMA concept was flagged as one of the 31 recommendations. What did the other 30 recommendations cover? They addressed a comprehensive list of issues, primarily relating to local labour resources. Items such as labour market data and workforce planning, training and apprenticeships, qualifications and up-skilling, education, 457 visa processing, increasing workforce participation rates, vocational awareness in schools and education facilities and housing and infrastructure.

The Resourcing the Future document is a sound and comprehensive document which successfully addressed the issues it set out to cover. Subsequent to the recommendations, the Department of Immigration and Citizenship (DIAC) released clear guidelines to the EMA submission and evaluation process.

Let’s look at the facts on EMAs:

An EMA can only be granted to so-called ‘mega’ projects – where capital expenditure is in excess of $2 billion

  • The peak workforce for a project awarded an EMA must be more than 1500 workers
  • Migrant workers brought in under an EMA must be paid Australian wages and provided the same working conditions as any other Australian worker
  • These skilled migrants will enter Australia on temporary work visas, not permanent residency visas
  • EMA guidelines are very specific with regard to the need for training. An employer bringing in migrant workers has an obligation to train a similar contingent of Australian workers. To address the skills required for the project, the guidelines articulate the requirement for training scope and numbers to commensurate with the  size and skills of the overseas workforce utilised on the project.

The Australian government has designed EMAs to benefit the Australian workforce for the long term, while ensuring the short-term needs of the construction projects are filled. 

The irony of the recent reactions to the first EMA, which have the pretext that the jobs of Australians must be protected, is that in essence this argument will prevent Australians from getting jobs and training as well as benefitting from the economic benefits this country needs from the resources boom to prop up other sectors until the global economic situation and Australian non-resources sectors improve.

What do major projects really mean in terms of jobs?

At the moment there is over $424 billion worth of committed major resources, energy and infrastructure projects happening in Australia, we also have over $316 billion of projects in the pipeline. During construction at peak these projects have the potential to engage onsite around 130,000 construction workers and over 20,000 workers in engineering and technical roles.

Now that’s just the workers going through the gate every day – our anecdotal research also tells us that during construction, for every individual onsite role, there is a factor of four workers engaged in roles supporting these projects, but not working onsite. These are workers with jobs in fabrication and component manufacturing workshops and material suppliers, as well as roles like road-train drivers, airline pilots and crew, fuel and provisions providers and business services such as lawyers, accountants, trainers and consultants.

The math’s isn’t hard – 150,000 x 4 = 600,000. On top of this, further demand is created in the broader community for those working in retail, hospitality, tourism, public services, education and the health sector.

An interesting side note on the so-called ‘billionaire mining magnates… When we put their holdings into perspective, out of the $740 billion of projects either underway or in the pipeline in Australia, by value the ‘billionaire mining magnates’ control is around 4% of the $740 billion.

Without much imagination it’s possible to see the direct impact and the multiplier effect of these projects having a defining impact on millions of Australians over the next five years. Additionally, during the next two years, these projects will engage up to an additional 40,000 operations workers and this will increase to around 100,000 by the year 2017. These operational roles aren’t just for a few months or a year or so, they are for 10 or 20 or 30 years.

Anything which impacts the progress of these projects has the potential to impact millions of Australian jobs and tens of thousands of training opportunities for Australians. Furthermore this is not restricted to onsite jobs in remote areas, this relates to jobs in every part of the country.

How might EMAs impact job numbers?

While there are up to 30 projects which meet the criteria for EMAs over the next five years, Pit Crew have undertaken some preliminary modelling based on 17 projects having EMAs in place in 2013 and 2014. Given the criteria, these 17 projects are representative of the largest and most significant projects in the country. This is reflected in a total capital value of $263 billion as well as their proportion of total demand. Of these projects six are committed ($148 billion) and 11 are in the project pipeline ($115 billion). The table below looks at semi-skilled roles on all major projects and also the 17 modelled EMA projects. 

The second point represents the total forecast shortage of the respective roles as per our most recent modelling.

  • Semi-skilled peak demand all projects: 42,900
  • Semi-skilled peak shortage (demand – availability): -27,000
  • Semi-skilled demand from 17 EMA Projects: 24,400

This modelling demonstrates that if all projects proceed, even if the EMA projects used 100% temporary overseas labour to fulfill their semi-skilled labour needs – which would never be a reality – a shortage of 2,600 workers would still result.

Now let’s run a scenario and say that some sort of worst-case/best-case scenario hits the market and suddenly we find a supply of Australian workers, qualified and experienced, happy to work onsite and ready to take up positions, let’s imagine 6,000 new entrants are mobilised (a 38% increase in the current forecast availability). Let’s also say that 25% of yet-to-be-committed projects vapourise, leaving a demand peak of around 35,000 jobs (if this really happened it would mean around $80 billion in projects cease to proceed). Balancing these figures will change the peak shortage to around 13,000. This means for the labour market to break even the EMA projects need to aim for fulfilling around 50% (12,200) of their semi-skilled resources from overseas. 

These construction peaks occur in a two year window from 2012. During this same period of time – even allowing for our best/worst scenario – there will still be a need for an additional 10,000 to 12,000 semi-skilled operations roles.

If you can accept logic like this, it’s apparent it doesn’t matter how you cut the cake, even with EMA projects in place using overseas labour, the Australian labour market will still struggle to keep up.   

Surely it makes more sense to use temporary overseas labour to get the projects constructed, and to capitalise on the resources, time and funds to train Australians to ensure ongoing operations resources?

If Australia can bring these projects to market in time, years and years of prosperity can be secured. The only conceivable way this can be achieved is with temporary labour. The EMA system is structured so that for each worker brought in from overseas a similar commitment is made to training Australians. These Australian workers are the ones who will benefit from the resulting long term work – the work that will really define the next 30 years.  

There have been some cheap, throw away lines about labour market analysis!

In terms of information sources, the foundation data for Pit Crew’s modelling is a list of major resources, energy and infrastructure projects. The Major Project List includes committed and highly probable projects in the market.  Information in the list comes from publicly available sources but, in many cases, this is supplemented by information direct from project owners. Publicly available sources include: ABARE/BREE, Chamber of Commerce and Industry, ASX reports, industry publications, union publications, company websites, industry briefings, media reports, subscriber-based project data services and websites, as well as the Australian Bureau of Statistics and a range of web-based information searches.

Data provided by clients and project owners is commercial-in-confidence. For Pit Crew’s subscriber based products any data provided by project owners is used as a comparator against the outputs of Pit Crew modelling rather than being incorporated into the modelling, thus eliminating confidentiality issues.

What is labour market testing?

Labour market testing is the process of advertising a position in Australia to try and fill a vacancy with an appropriately skilled Australian citizen or Australian permanent resident. The DIAC guidelines specifically acknowledge that EMAs will be negotiated ahead of attempts to recruit labour, and therefore labour market testing is not required.

Imagine it’s a hot summer day in January and someone is dipping their toe into a swimming pool, the water temperature is lovely. This is the labour market test. What is illogical is when this person goes on to conclude there will be no need for a water heater or a pool blanket or a wet suit… for the swim they are planning in the bitter cold of July!

Labour market testing is the thermometer, where labour market analysis is the barometer. While a thermometer is a useful instrument, its application is in immediate real time. A thermometer cannot read the temperature in the future. While neither can a barometer, the barometer is a far more complex instrument – it uses other information then combines this with a raft of knowledge of previous trends and patterns and provides a forecast on what may lie ahead.   

There is a place for labour market testing, and it’s once the project has commenced, this has already been recognised in the EMA guidelines. However at this early stage, labour market analysis will provide the forecasts needed to predict the labour market over the next two to three years and to provide foundation data for workforce and training plans.

Labour market analysis assists with identifying potential skill shortages so that mitigation strategies can be developed and implemented. This is undertaken as part of identifying commercial and other risks to projects as part of final investment decision. Skills shortages are a risk that requires strategies and EMA’s are a potential strategy, but not the only one, to address this risk.

Source: Pit Crew News, Issue 04, June 2012